Oisix ra daichi Inc.
Financial Results Briefing for the Fiscal Year Ended March 2020
May 28, 2020

Event Summary[Company Name]

Oisix ra daichi Inc.

[Event Type]Earnings Announcement[Event Name]

Financial Results Briefing for the Fiscal Year Ended March 2020

[Fiscal Period]

FY2019 Annual[Date]

May 28, 2020

[Number of Pages]

46[Time]

16:00 – 17:01(Total: 61 minutes, Presentation: 33 minutes, Q&A: 28 minutes)[Venue]Webcast[Venue Size][Participants][Number of Speakers]

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Kohey Takashima

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Presentation
Moderator: Everyone watching, thank you very much for joining us today. Now, we are holding a financial
results briefing for the fiscal year ended March 2020 for Oisix ra daichi Inc.
Today, we will have a question-and-answer session after Mr. Takashima, our Representative Director and CEO,finishes the results briefing. We already have some questions that have been submitted by our shareholders
in advance. We will answer these questions first and, after that, take questions from those who have any to
ask after hearing the briefing.
We are recording today's briefing session. We will make it available on our IR website at a later date.
Now, Mr. Takashima will give you the briefing. President Mr. Takashima, please.
Takashima: Hello everyone. Thank you for gathering today despite your busy schedule.
This is the first earnings announcement session for us after the Company’s stock was moved from the second
section to the first section of the Tokyo Stock Exchange. Therefore, we really wanted to meet with you faceto-face to brief the results in detail and hear your questions and comments directly. However, considering
today’s social situation, we decided to hold the session online this time.
We announced our financial results last week and already shared many documents, comprising most of theavailable information, with you then. So, I have selected a part of the information and will give you a briefing
on our earnings results based on the information. Also, there is some new information we have added, so
mainly, I would like to talk about that.
This time, possibly because the environment surrounding our Company has changed and also because having
the session online makes it easier for people to participate, there seems to be some first-timers who have notbeen attending our earnings announcement sessions in the past. So, I would like to start today’s session by
going over what our Company has been up to, including the introduction of our Company and its businesses.
First, I would like to give you a briefing on the Company’s financial results for about 30 minutes, and thenmove on to the question-and-answer session.
Let me explain the structure of today’s session in the order of the topics we’ll talk about. As can be seen in
the overall composition of the materials, I will first describe our financial results, followed by the measures
we are taking against the new coronavirus. Then, I’ll move on to present the further details of the results aswell as our future business strategies and forecasts. Among all these topics, I will particularly focus on themeasures we have taken to prevent the spread of new coronavirus infections and the business strategies forthis fiscal year. As for the other topics, the situation has been virtually unchanged from the time we shared
the latest financial results with you the other day, so I would like you to refer to the materials to check on
them.

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2Let me begin by introducing our corporate philosophy.
Our Company was established through the merger of Oisix, Radish Boya and Daichi wo Mamoru Kai. Over the
past three years, the three brands have been integrated and, in the process, we also redesigned our corporate
philosophy. Because all brands value having corporate philosophies, the newly created Oisix ra Daichi also
values having corporate philosophy statements that state why our Company exists.
To tell you why our Company exists, we exist to create a new food cycle under the slogan of “Farm for
Tomorrow, Table for Tomorrow.” That is the raison d’être of our Company.
As written in the second statement from the bottom, we are aiming to solve social issues related to food
through business approaches. Needless to say, the purpose of our business is to generate profits. However,
we are also conducting business activities with the aim of addressing food-related social issues and havealways kept this aim in mind when establishing various businesses and providing new services.

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I would like to briefly report on our business results.
They are stated in the text of the Executive Summary. We always include this (Executive Summary) page inthe materials for every financial-results briefing session. This page is provided every time financial results areannounced. Last year, the fiscal year ended March 2019 included rather irregular factors, which made it a bit
difficult for us to convey the results clearly on that page, so I'm going to explain about these factors.
The factors include a change in the consolidated fiscal year of Radish Boya resulting in the recording of 13
months total of sales and profits, and the tax effects occurred from the operating loss carryforwards anddeferred tax assets resulting from the merger of Radish Boya whose business had been unprofitable for a longtime. Thus, at a first glance, net income of the last fiscal year seems to be greater than in the normal years
due to these effects.
Then, let’s look at the factors for fiscal year ended March 2020, some of which actually occurred in the last
fiscal year. New developments in the fiscal year ended March 2020 include that Dean & DeLuca became ourCompany’s affiliate accounted for by using the equity method, and that Purple Carrot in the United States was
consolidated as a 100% subsidiary in the second half of the fiscal year.
Based on the above factors, I would like to explain the financial results.

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First, sales stood at JPY71 billion as compared with our forecast of JPY70 billion. We expected that sales would
be around these figures and it looked like the sales would be in line with our forecasted figure. But the impactof the spread of new coronavirus started appearing in March, which led to an increase in ARPU. This andespecially a growth in the average spending per user helped push up sales by a little less than JPY10 billion or,
more precisely, about JPY900 million, to about JPY71 billion.
On the other hand, in terms of profits, we had to record a substantial amount of extraordinary losses or costs
if not extraordinary losses due to major typhoons that hit Japan last year. As a result, we struggled for a while
to keep sales at the amount that may be barely enough to achieve our target profit. Then, the new coronavirus
crisis occurred in the final part of the fiscal year, resulting in an increase in sales that subsequently pushed up
profits.
As I will tell you later, there is also the promotional budget that has been left unused because we became
unable to conduct promotional activities because of the new coronavirus. This has also helped to increase
profits by about JPY250 million and, as a result, achieve our profit target.

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5For other details of the results, I would like you to see the materials again. I just want to explain a little about
the business results by segment.
First, the Oisix brand has been growing by about 20% YoY. Amid increasing scale of sales, the pace of growth
has not been slowing. In particular, the sales of meal kits have grown substantially again in the last fiscal year.
On the other hand, in regard to the Daichi wo Mamoru Kai brand, the last fiscal year was the second year after
the integration of the brand. A decline in the membership that had continued for a while stopped more or
less, and net sales stood at 97% of the last fiscal year. Judging from these developments, we feel that theDaichi brand has become just about ready to make a V-shaped recovery from now.
About the Radish Boya brand, we have been operating it like on a trial basis for one year since the brand was
fully integrated last year. We have been focusing more on cutting back on the number of unprofitable orders
rather than the fact that sales have declined.
In addition, because there are still some uncertain elements in the operation of Radish Boya, we have been
trying to make these elements more certain and reliable before moving on to establish a structure thatenables us to increase sales. We merged Radish Boya one year after Daichi was integrated. In this situation,
we are making the efforts that I have just mentioned for the Radish Boya brand.
That’s all for the overview of business segment results.

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Next, I would like to talk about the impact of new coronavirus in three parts.
First of all, because our Company’s business is a food-delivery service, we recognize that it is important tohave a solid business-continuity system. We have been trying to introduce telecommuting as much as possible
into the operation of the headquarters just like typical IT companies have been doing, which has resulted in
the current telecommuting rate of around 15% or 16% of the all employees working at the headquarters. For
distribution centers, we believe that it is critically important to ensure thorough hygiene management.
From a long time ago, food centers in Japan have always boasted a fairly high level of hygiene control andcleaning has always been done very frequently and thoroughly in those food centers. As a result, measures toprevent infections have already been taken actively on a daily basis even before the outbreak of the newcoronavirus.
In addition, we are thoroughly implementing measures such as measuring the temperature of employees
before they enter the worksite every day and having employees keep enough distance between them not
only in work sites but also in rest areas to help them avoid the three Cs (Closed spaces, Crowded places, andClose-contact settings).
Fortunately, no employee has been infected with the new coronavirus so far, but in the event that theinfection occurs, we already have a system in place that identifies the site of the infection and the people whohave had close contact with the infected persons to allow the business operations of the centers to continue
without interruption by cleaning and disinfecting the relevant areas.

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On the delivery side, some of our customers said that they feel much more comfortable having their orders
delivered through unattended delivery rather than receiving them directly from a delivery person. Thus, wehave been working with Yamato Transport, our delivery service company, and other shipping companies
entrusted with the delivery of our products to increase the number of unattended deliveries.

Next, I would like to talk about the impact on our business and our social-support activities through business.
First of all, because I don't have time to explain our social-support activities in detail today, I’ll just give you asense of the activities we have engaged in. Basically, we are conducting many activities through our threeecommerce websites and other platforms.
For example, we helped to sell all milk that was at risk of having to be discarded because of a drastic increasein the amount of surplus milk. We also provided support to Hokkaido when the area was faced with a financial
difficulty following the state of emergency declaration. We will introduce some of our social-support activities
later.

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We will explain the details of impact each brand has suffered by using circles to show positive impact andcrosses for negative impact.
For Oisix, positive influences shown by circles include a slight increase in ARPU and some social-support
initiatives having been implemented quite promptly. However, there have been many issues that could havedone much better, which made us suspend conducting promotion activities for Oisix for a month. During thattime, we guided existing and prospective customers of Oisix toward Daichi or Radish Boya services.
For us, this March and April are very important promotional periods in an ordinary year. Many people start
new life in March and April and change their lifestyles. We were preparing to conduct promotional activities
for these months because we have been able to acquire many customers by taking advantage of this timing
every year. However, we were not able to do the planned promotional activities. That’s one of the major
regrets we have.
We have started conducting promotional activities gradually, but the activities implemented so far have only
been limited and they have been conducted only little by little.
Because the expenses for PR activities have been left unused, our business seems to have recorded anincrease in profits. But the fact that we couldn’t do much of the planned PR activities will bring about lost
sales in the future.
If, for example, we have set the budget for PR activities to acquire 10,000 customers and the budget remains
unused, we can naturally save the money allocated for the PR budget for the time being. However, considering

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9that our customers normally spend about JPY200,000 per person annually, if we cannot acquire 10,000
customers in April as we planned, we will end up losing JPY2 billion worth of annual sales. This means that wewill also lose profit on this JPY2 billion worth of sales. These are some of the impacts Oisix is now suffering.

As I just mentioned, our social-support activities include helping to sell surplus milk and proposing ways andproviding means to make their stay-home lives more enjoyable.

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10One of the new things we have started lately is an initiative called “Home Restaurant” through which we sell
products of restaurants that became unable to operate because of the new coronavirus. Specifically, we
advertise and offer their food products via our websites and deliver them to our customers together with our
products. The partner restaurants in this initiative include Tsukada Bokujo and Kushikatsu Tanaka. The partner
restaurants have been very supportive and responded to our requests very promptly. Thanks to theirwonderful cooperation, we were able to launch the Home Restaurant section in all of our websites.

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I will now talk about the most difficult issue we have had to deal with. We are still struggling to address thisissue through trial and error. We started building the Ebina Station that will be completed in September 2021,
and the center will have a shipping capacity of three times more than the existing one. Construction of thecenter is already underway as planned and, so far, there has been no delay in the construction schedule.
Until now, if the growth in sales continued to be as mild as it has been, we thought we could handle theincrease in orders by using several satellite centers. However, there has been a sudden increase in sales andaverage spending per customer; the demand has exceeded our capacity. This is a new issue we are now facing
because of the impact of new coronavirus.

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Then, regarding Daichi wo Mamoru Kai and Radish Boya, there was an increase in the number of customers
brought about by the growth in ARPU, organic search, or guiding existing and prospective customers from
Oisix to Daichi and Radish Boya while Oisix stopped its operation.
With regard to capacity, all the brands are okay at this point in time. At present, Oisix, Radish Boya, and Daichi
are basically using different distribution centers, but we will soon be able to handle deliveries of Radish Boyaand Daichi together at the current distribution centers. However, there have been some products that are outof stock, and we are planning to address this issue by enhancing what we call “planting,” which actually meansincreasing the amount of contract cultivation.

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Regarding other businesses, we operate businesses that support ecommerce services of other companies,
such as the "d meal kit" in collaboration with Isetan and NTT Docomo. However, all of these businesses are
now facing the same situation as Oisix, and they have temporarily suspended their promotional activities.
Then Tokushimaru, a service that sells products in wagon-based mobile grocery stores to what we call“shopping refugees” who live in remote places with little access to shopping facilities. As the issue of such
shopping refugees has garnered increased public attention amid the new coronavirus crisis, average spending
and frequency of use per customer have been increasing, resulting in an increase in what we call the daily
sales amount.
Our overseas businesses have also been substantially impacted by the new coronavirus crisis in all countries.
Sales in Hong Kong increased at a faster pace than in Japan, and the sales of companies we have acquired in
the United States also grew significantly. Our overseas businesses are also facing the issue of limited capacity.

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The service that has experienced little increase or decline due to the impact of the new coronavirus is called“Shop in Shop,” but it's a business that sells products in a shop in supermarkets. Sales have increased in the
shops operating in supermarkets that have stayed open, but the shops operating in department stores andcommercial facilities that were closed down entirely have been unable to record sales at all during the closure,which brought down the total sales. So, it’s like the sales increase brought about by the shops that remained
open were offset by the sales decline by the shops that were closed.
In addition, the wholesale service for nursery schools has suffered a negative impact. Our Company has been
selling foodstuffs to some 350 nursery schools. Sales in this business have decreased sharply because many
nursery schools were closed during the state of emergency period.
The advertising business, for example, having advertisers run their ads on the surface of our cardboard boxes
and so on, has been suspended for the time being.
The business that has suffered the biggest impact is our affiliate, Dean & DeLuca, which stopped operatingnearly all its stores during the first month of April. This business segment has brought about the biggest impact
on us because the sales of this affiliate now account for some 20% of our consolidated results.

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Furthermore, this is not a business of our Company, but we are operating a platform to provide support to
medical/health care institutions together with Seino Transportation and a not-for-profit organization called
RCF. The slide here says that the total amount of support extended is about JPY200 million, which is not the
donation from my Company alone. Rather, the amount stands for the total price for foodstuffs that have been
provided by over 70 food-producing companies in response to our call for donation. The amount has alreadyexceeded JPY200 million, which will probably continue to increase in the future. These foodstuffs have been
sent to hospitals to provide meals to medical professionals who are reportedly too busy to eat. Through thisinitiative, we have been supporting medical and health care workers.
I will not talk about the business results by segments shown in the following pages because nothing haschanged from the information presented in the materials.

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I would like to briefly explain our future business strategies.
First, I want to go over the points that we perceive to be our Company’s strengths. One of the key features of
our Company is the fact that we offer end-to-end food delivery and subscription services that include allservice providers from upstream to downstream of supply chains. One characteristic of our business model isthat we procure products through a network of competent producers that we have established rather thanfrom wholesalers or markets. We have not a wholesale or market but a direct network and a network of
excellent producers. Having the three brands working together, I think we have a fairly strong purchasing
power in this area.
In addition, because all brands have been operated based on a subscription model, I believe that we haveaccumulated a great deal of marketing know-how related to food-subscription services.
The next element is the distribution part of our service. Currently, I don’t think that many food-delivery service
companies are providing B2C services as attentive as ours, such as delivering meal kits by procuring necessary
foodstuffs and putting them together in-house. I think that this attentiveness in service has been greatly
appreciated by customers in the recent coronavirus crisis, but it has also presented us a problem of thedemand exceeding our capacity. Despite this current issue, this is one of the notable characteristics of ourbusiness.

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We have established subscription methods and what we should be doing now varies depending on which
phase each business is in.
In Oisix, some services are undoubtedly in an expansion phase, and some are entering a new, servicedevelopment phase.
Daichi wo Mamoru Kai has just finished the so-called business-turnaround phase in which we make its
businesses leaner, streamline operations, and withdraw from unprofitable services. We finally finished thisphase of improving areas that are very unnoticeable and fully corrected them in the first half of the last year
and have entered the phase of creating new services from the second half of the same year.
Radish Boya was in the same phase as Daichi was until the first half of last year. We still have some operational
issues but resolved the problem of unprofitable orders during the last year. Now we are working on building
abilities that will serve as the basis for services.
In fact, these are the things we have always been doing.

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In addition to implementing growth strategies in line with each business phase, I explained at the previous
financial-results briefing our plans to raise profitability. In response to the current coronavirus crisis, I haveraised three, new, key points.
The first strategy involves a shipping system I have repeatedly mentioned today. We need to take measuresto raise our supply ability and capacity to respond to demand.
The second strategy is to implement a growth strategy that not only responds with the business phase but
also with food needs being brought about by the new coronavirus. I think that we will enter the era in which
we live with coronavirus and, after that, the post–coronavirus era will begin. As these changes occur,
customers’ needs for food will change accordingly. We will need to respond to these promptly andappropriately.
The third strategy involves the profitability enhancement measures we plan to conduct. Because some of themeasures have become difficult to implement because of the impact of new coronavirus, we will review themeasures and implement new ones that incorporate the needs brought about by the coronavirus.
Our policy for the current fiscal year is to implement three measures of pursuing capacity improvement,
growth strategy, and profitability enhancement. I would like to explain these briefly one by one.

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19For the first issue of capacity improvement, the biggest problem has been our distribution capacity. Our
distribution center was originally located in Ebina City, Kanagawa Prefecture. Because shipping demand has
increasingly exceeded the capacity of the center, we have taken some emergency measures from this April.
First, we started having some of the trial sets shipped from a distribution center for Radish Boya in Zama,
which is located about 30 minutes by car from Ebina.
Second, we have enhanced the facility of Fujisawa Distribution Center, also located about 30 minutes from
Zama and Ebina, and are now preparing to relocate some services with small SKUs. The preparations havealready been completed and we have begun to receive orders for this new service since April 30 while
monitoring the status of our customers.
The right hand of the slide shows the new Ebina Distribution Station that had been planned before the newcoronavirus outbreak. However, it will take 15 to 16 months until the Station is completed. We need to comeup with ways to manage the demand until the completion. What we are planning to do is to start using satellite
centers from this autumn to manage the demands for 16 months from now.
These satellite centers will not be built with a large amount of initial investment as we did with the new Ebina
Station, but rather will mainly be based on manual operations. We are planning to establish another centerin the Kanto region but have not concluded a contract for it yet. However, we have almost decided on alocation and are now making necessary preparations.

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The service we can provide with small SKUs is this “Sakutto! Oisix.” Oisix has more than 2,000 or nearly 3,000
SKUs, and this service only requires one 10th of the SKUs. This service is operated with just under 300 SKUs.
By using this service, customers can shorten the time they spend for shopping. Therefore, we plan to promote
this service targeting customers who have greater need for quick shopping than conventional customers.
The service has already been launched and, at present, it has been operated with no major problems, and weare gradually expanding the service while monitoring the customers’ responses.

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21Second, we are implementing a growth strategy to address the changing needs of customers for food.
First of all, we are seeing the meal needs of customers becoming increasingly diverse for shortening the
preparation time. For example, we have plans to offer a program in collaboration with a popular character
Shimajiro in which children can help their parents cook meals. Another program we have in mind is offering
Purple Carrot to customers in Japan to promote healthy meals rich in vegetables.

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What we announced last week was "Harumi Lesson," the program we inaugurated in collaboration with Ms.
Harumi Kurihara, a famous home-cooking specialist. We have also started a service to provide meal kits thatallows customers to cook Kurihara’s dishes while learning cooking at home.

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We launched the Home Restaurant service as an emergency measure to support restaurants in response to
the new coronavirus crisis, but the service has been well received by many customers, so we have decided tokeep it as one of our permanent services. In addition to Tsukada Nojo and Kushikatsu Tanaka, who were ourfirst partners in this service, we intend to extend the number of collaborating partners to include Michelinstarred restaurants.

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24For Daichi wo Mamoru Kai, most of its customers are in their 60s and 70s, and they are much more interested
in improving their health and immunity. We will continue to develop and offer health-food products as
fermented foods.

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For Radish Boya, most of its customers are in their 50s and are good at and fond of cooking. By taking
advantage of the current change brought about by the coronavirus outbreak, which has increased the time
its customers can spend at home, we started offering online cooking classes and other services in connection
with Radish Boya.

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With Tokushimaru, we started to collaborate with Ito-Yokado and have expanded its business bases to all
prefectures with the opening of a store in Okinawa last month. We plan to offer services through Tokushimaru
that will help get rid of the shopping-related anxiety of elderly customers who are said to be at higher risk
from coronavirus.

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There are also some negative developments. One is with a subsidiary of ours called Crazy Kitchen, specializedin catering services. Because there are events that require catering service now, they are now looking for new
business formats. Then there is the issue of Dean & DeLuca that I have talked about repeatedly.

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The third strategy is to strengthen profitability. In the past, there were four pillars for our profitability
enhancement measures that include reducing product costs, cutting back on logistics/delivery costs, andincreasing average purchase per customer.
We are now two issues into these pillars. First, as I mentioned earlier, we will increase the number of satellite
centers, which will ineffectively reduce cost efficiency. Therefore, we are now planning to take additional
measures to address the situation.
Then, we originally aimed to increase the average spending per customer by expanding our product lineups,
but this has also become difficult because of the capacity limitation. So, we will need to think this over.

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We are now planning to establish a new profitability enhancement strategy by adding one new measure to
the previous four pillars.
The two measures for improving products’ costs are same as what we have originally planned. Regarding
logistics and delivery costs, we are considering improving the parts that will be brought from the new delivery
center to our own distribution center.
In terms of the average spending per customer, we intend to achieve that not by increasing the number of
items we offer, but by increasing the number of subscription services we offer.

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I would like to talk about the progress of the four initiatives.
"VegeNeco" Project is a joint project with Yamato Transport, through which we plan to reduce the cost ofhorizontal shipments. As the project has been progressing smoothly, we plan to proceed to full-scale launchof the project from this year.

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We are making further efforts to shift to SPA, which means expanding in-house production efforts. Throughthis effort, we have also successfully reduced costs for several brands.

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Regarding distribution, the new project we have invested in has been proceeding as planned but the resultsof that investment will be seen only after the fall of the next fiscal year.

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We will start integrating the distribution services mainly through establishing the collection center for Radish
Boya until the new distribution center become operational after the fall of the next fiscal year. We plan toreduce procurement costs by improving logistics through consolidation of suppliers and collection methods.

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Then, as it has now become difficult to expand the average spending per customer by increasing SKUs, wehave promotion initiatives in all of our brands to invite subscription-service customers to add othersubscription-service options. By doing so, we plan to increase the average sales or spending per customer.
I hope to raise our profit margins by taking the initiatives I have explained.

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As a result of the recent developments, it is very difficult for us to forecast the results for the current fiscal
year, but we forecasted the figures tentatively as above. According to our forecast, sales will be JPY78 billion,
EBITDA will be JPY4.4 billion, and the operating income JPY3 billion, assuming that we will raise profitability
by taking the measures I have explained.

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In terms of the membership, we set 367,000 as the target for the number of members at the end of thecurrent fiscal year.
I may have talked too long but this is all from me.

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Question & Answer

Moderator: President Mr. Takashima, thank you for your briefing. Now, I would like to move on to thequestion-and-answer session. First, I will read the questions that have been submitted by our shareholders
beforehand.
First question: You said that the Company has been facing increasing pressure from the limited shipping
capacity. This question wants to know how much impact the Company will suffer from losing prospective
customers because of the suspension of accepting new members due to the lack of shipping capacity. The
questioner asks how you would deal with the shortage of shipping capacity.
Takashima: This question concerns what I have just said. As an example, I said that the number of prospective
customers we have lost was about 10,000. We estimated the number of lost customers during the period
while we stopped accepting new customers so far at about 10,000.
We are still not in a state in which we can swing our bats with full force, so we need to monitor the situation
by taking a close look at how big the impact will become. Until we add another satellite center, we will increase
our productivity as much as possible by raising the productivity of the existing Ebina center and the newly
established satellite centers in Fujisawa and Zama as much as we can, and expand our customer base within
the capacity of these centers until autumn.
In particular, Fujisawa can handle a lot more services with small SKUs, so the center will concentrate on
providing these services for the time being. If a new satellite is added after the autumn, it will be possible toprocess a greater number of full-scale services. From fall onward, we plan to expand operations by increasing
both full-scale service and the newly inaugurated “Sakutto! Oisix” service.
Moderator: Thank you. Now, let me move on to the second question. This question also asks about acquisitionof new customers in relation to the limited shipping capacity.
The questioner would like to ask you about your policy for the quarterly allocation of PR expenses in the future
and what your thoughts are about the change in pace of acquiring new customers based on the expense
allocation.
Takashima: This question has much to do with what I have just said. In the first quarter of this fiscal year, we
will look at the situation and act within the range of the current shipping capacity.
If we can see how the "Sakutto! Oisix" service will perform during this quarter, the second quarter is not
usually an easy time for us to acquire new customers. In this year, however, the summer vacation will probably
be short, and the situation will also change in other aspects. Thus, in the second quarter, we will focus onpromoting the “Sakutto! Oisix” service, whose SKUs are small, if we can, and I hope that we will be able topromote full-service services from the second half of the fiscal year.
So, we want to somehow get the lost opportunities back. I would like to spend the unused PR expenses thatwere originally allocated for April and May in the first quarter by the end of this fiscal year, and achieve themembership target I have just mentioned. Looking at P&L on a quarterly basis, we believe that there may bea slight variation in our performance, but basically we plan to pursue our activities in line with this policy.
Moderator: Thank you. This is the third question submitted by our shareholders in advance.

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The question asks that, as we enter the era of living with the coronavirus, what kind of measures do you havein place to respond to an increase in food consumption at home and to prevent the recent increase in ARPU
of current members from falling?
Takashima: I'm not thinking much about preventing the current ARPU of our customers from falling because
the current rise in ARPU was achieved through unusual purchasing behaviors of the customers under theabnormal circumstances. So, I think that the current ARPU will inevitably fall. I think it is important to promote
appropriate, non-excessive buying behaviors among our customers.
I mentioned earlier that each brand will be responsible for responding to the coronavirus-related changes. In
addition to that, we see that there has been an increase in the opportunities for people to eat meals at home.
We used to offer products and services mainly for dinner but, as we have more opportunities to eat lunch athome, we are considering new services to provide foodstuffs for lunch and other meals.
Moderator: Thank you. We are done with the questions we have received from our shareholders in advance.
So, we are moving on to take questions from those of you watching this session. If you have any questions,please type them up and send them through the Q&A section.
We have received one already! I’ll read it out loud now.
This question asks about the growth rates in businesses in the other business segments of your Company,
such as Purple Carrot, business alliances with other companies, the Shop-in-Shop business, and the wholesale
service to nursery schools.
Can you provide the estimated growth rates for these businesses in terms of the annual growth percentage?
The questioner wants to know what your thoughts are for the possible growth rates of the businesses.
Takashima: It's very difficult to predict those now that it is extremely difficult to forecast growth of our threemajor brands under the current circumstances.
Purple Carrot is having a really difficult time in the US. Purple Carrot has achieved substantial growth in the
short term with some of its centers reaching their capacity limits. However, this surge in demand is not theresult of sudden improvement in the abilities of Purple Carrot after all, so I believe that it will gradually calm
down. I don’t think its business will grow two-fold, but it will grow to some extent.
The EC collaboration service businesses we have are the ones operated with Isetan Door and “d meal kit.” We
will resolve the issue of capacity limitation of our centers through the means I mentioned earlier. However,
because the EC collaboration businesses are not the ones solely operated by us, it makes it difficult for me togive you specific forecasts. I am not saying that they won’t grow at all—they will probably grow—but it all
depends on how much promotional activities NTT Docomo and Isetan will be willing to conduct.
Shop in Shop and nursery school businesses are unlikely to grow so much this year. The wholesale service fornursery schools has been suspended or decreased substantially for the time being. And we are considering
ways to recover the business in phases.
In both the Shop-in-Shop and nursery-school businesses, it is more important for us to realize marketingsynergies than pursuing sales and profits. For example, we are hoping that people who bought Kit Oisix
products in supermarkets will move on to become Oisix subscription customers. Or mothers who found theirchildren eating a lot more in their nursery schools than at home because the foodstuffs used for school lunch
are from Oisix grow interested in the Oisix service.

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Creating marketing synergies like these are more important for us. Currently, I think that we are in a phase inwhich we are building the base to create these marketing synergies rather than merely striving to increase
sales.
I’m sorry that I can’t give you specific figures at the moment for these businesses. As a whole, we will go forthe sales of JPY78 billion that I mentioned earlier. As we strive to achieve this goal, we will include efforts for
the Shop-in-Shop and nursery-school businesses. However, honestly, we have not been able to look into themin detail.
Moderator: Thank you. Now, let me move on to the next question.
You have explained about acquiring new customers earlier. The questioner wants to know if you have any
measures in mind to upsell Daichi and Radish Boya brands that have experienced a decline in membership.
Takashima: With regard to Daichi, the decline in the number of people that had continued for some time
basically stopped last year, and this year we planned to take on the challenge of realizing a V-shaped recovery
for the brand. The number of customers has increased a little in the short term, which probably makes it
difficult to see the real situation.
As the social environment settles down, I want to start measures to acquire new customers by offering newservices that I originally planned to offer.
Regarding ARPU, I think that it has gone up to the highest possible level now. ARPU has always been very highfor Daichi but it now become even higher. I think we have enjoyed the results of the increased ARPU enough.
For Radish Boya, we really need to reduce the number of subscribers a bit more for the time being to resolve
the operational issues. We have been in a situation where new customers keep coming but become
dissatisfied with the operations and leave the service, just like pouring water into a cup with a hole in thebottom. I was thinking of taking measures to block the hole completely and moving on to conduct promotional
activities. But, before doing that, the number of customers has surged.
So, for now, we are working to improve the existing services and operations so that some of the newly joined
customers will like Radish Boya and decide to stay on. It will probably take six months to one year before wecan start making specific efforts to increase the number of Radish Boya customers by adding new services.
Moderator: Thank you. We have received some questions concerning the impact of the new coronavirus. I
would like to move on to those questions.
This question is about the impact of the coronavirus. The questioner wants to know what your thoughts areon how the virus has impacted society and changed the minds of consumers.
Takashima: About the new coronavirus, I think we are still at the beginning of ensuing effects of the virus. I
think that the impact of the virus we will see in the future will be a lot different from what we have seen in
the past.
So far, the impact we have seen has a lot to do with the fact that people had to stay at home and eat a lot
more meals at home than before, so there was a temporary surge in demand for food-delivery services
because people wanted to stay home as much as possible. In that process, I thought that many people had toeat meals at home.
As a result, the change we have seen is that those who cook meals at home have become increasingly diverse.
For example, at households in which moms used to cook meals all the time, dads started cooking at times or

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eating takeaway meals from restaurants. We have been discussing the possibility of the future in whichhomemakers collaborate with professional chefs. I think that the recent development we have seen is thatthose who cook at-home meals are becoming increasingly diverse.
Going forward, of course, there will be various changes, and if the economy slows down even more, people
will tighten their purse strings, which will be bring both positive and negative consequences to our Company.
Because each of our brands sells products that are fancier and thus more expensive than the products sold in
the market, people might start having second thoughts about keeping on buying our products. That will be
one negative consequence. On a more positive note, people may find using our products and eating homecooked meals much cheaper than eating out in restaurants or spending money on other expensive leisurepursuits. I think we need to come up with ways to deal with both consequences. If there is a second and third
wave of coronavirus infections, I think there will be a temporary, functional increase in demand.
So, about how things have changed by the coronavirus, there are things that have changed and there will beother things that will continue to change in the future. That’s all. We just have to respond to any change as it
occurs without sticking with the fixed services and keep changing our services as flexibly as possible in order
to better deal with the challenges faced by our customers at the time.
The most important of these processes is ensuring the safe environment to ensure continuity of service. If
you can't do that, no matter how much marketing activities you do or how excellent they are, whatever we
do will become meaningless. I think it is best for us to continue responding to changes while ensuring thesafety of the environment in which we conduct our businesses.
Moderator: Thank you. There’s another question concerning the new coronavirus. People have been sayingthat the economy will continue to stagnate due to the effects of the coronavirus, which will make consumers
prefer lower-priced products. The questioner wants to know how much you think your Company will suffer
the effects of not only the coronavirus but also of the ensuing economic slowdown.
Takashima: This question also overlaps with what I mentioned earlier, but I think there will be both positive
and negative consequences.
All our brands survived the global financial crisis that followed the collapse of Lehman Brothers and we havedata on what kind of issues or opportunities they had during that time. In addition, we actually had the data
showing that virtually all cities that hosted summer Olympic games experienced an economic downturn after
the games. We have actually forecasted that Japan will face an economic downturn in 2020 and 2021 basedon those data.
In fact, we are trying to decide on what measures we should take from now on by drawing on these forecasts
and also some patterns we identified from our experiences following the collapse of Lehman Brothers.
So, of course, it would be better for the economy to be strong, but there will inevitably be some negative
consequences. Despite that, we plan to operate our businesses by focusing on our unique strengths as a
Company offering subscription services and home-delivery services in today’s social situation.
In times of economic downturn, people often start to focus on not only prices but also the quality of foodstuffs
to maintain their health. They often find that it comes out cheaper to spend money on high-quality foodstuffs
than becoming sick. We intend to provide our customers with the kind of services that make them think thatspending money in our products is the right way to spend their money.
Moderator: Thank you. Then, I have another question for you.

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Last year, you were willing to pursue M&A and alliance opportunities. The questioner wants to know whatkind of policy you now have about M&A activities going forward.
Takashima: Of course, M&A remains a possibility for us, but I will not pursue M&A as part of our growthstrategy. I believe that organic growth of more than JPY100 billion would be possible by expanding the current
services. We believe that doing so will be the basis of our growth strategy.
However, I would like to aggressively pursue M&A opportunities if possible. In my opinion, there are about
three major approaches to M&A. There are M&As that will help improve our strengths further, the ones thatwill help us acquire businesses that we do not own, and the ones that will enable us to acquire functions that
we do not have.
Speaking of the strengths of our business, our strengths lie in being a food-delivery business Company. So, I
would like to actively undertake such projects if there are any such projects that allow us to harness thesestrengths. Through Oisix, Radish Boya, Daichi, and Purple Carrot, we believe that we have acquired thebusiness methods that we can use universally with all brands of any kind. I would like to pursue this kind of
M&As if such opportunities arise.
Then, about M&As to enable us to acquire a business that we did not have, one such case is what we havedone with Dean & DeLuca, by taking an equity stake in the Company. As it happens, the Company is facing areally tough situation at the moment. But we hope to learn from this experience so that we can successfully
undertake M&As that will allow us to make up for weaknesses of our Company.
M&As to add functions that we do not have can include acquiring an IT company instead of hiring engineers
or acquiring a design company instead of hiring designers. We always seek these M&As as possible options
and, even though the scale of these M&As tends to be small, I would like to take it up if I have the chance.
These are my thoughts for M&As at the moment.
Moderator: Thank you. Now, let me move on to the next question.
You have explained about logistics and distribution earlier. In considering bottlenecks to growth, for example,
do you have any concerns about procurement?
Takashima: On the procurement side, as we are not purchasing from the marketplace in the short term, there
will be always a possibility for us to become unable to procure some products because, for example, demands
for and the sales of those products have increased 10-fold this week from the last week. We will have toaddress situations like this by increasing the amount of planting or contract cultivation.
If I were to select one issue that has been significant for us, it would be that we have often been faced withsituations in which we made a purchase contract based on bullish expectations but find ourselves with a lotof unsold products. However, today, with the three brands merging, I think we will be able to resolve thisissue.
If any of our brands placed a bullish order and ended up with having too much spinach, for example, we canalways sell the surplus spinach through other brands. We now have a lot more flexibility in moving products
like these among our brands.
As each brand has its own cultivation standards that vary slightly from brand to brand, we will move products
among our brands only within these standards. We have now become increasingly able to move surplus
products among our brands by strictly observing their standards. Each brand procures its products separately,
but the current structure has made it possible for them to place more bullish contracts.
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The important issue to address on the supply side is to procure products in an amount that is not too much,
but even if it were too much, we would be able to sell all of them. If we can keep doing that, producers willfind it more profitable to do business with us by growing products organically or with reduced amounts ofpesticide. If producers find it more favorable to grow products for us, we will probably resolve the issue of
our capacity and supply ability.
Moderator: Thank you. I would like to move on to the next question. This question is regarding a specificproduct category, which is marine products.
The questioner wants to know how sales in marine-product sales have changed over the last year. The
questioner also wants to know whether your Company has successfully continued supplying marine products
in a stable manner amid the new coronavirus outbreak.
Takashima: I don't think there has been any notable decline or increase in sales in the marine-productcategory during the last year. Some signs of demand are being felt in a service offered by Daichi to provide
customers with easy-to-eat fish by developing products and increasing the fish species continuously to fulfill
the needs of this service.
Among our customers in their 60s, there is a sense that eating more fish is better for their health, but in their
daily lives they feel that fish is lacking. Therefore, I think that they have wanted to find products that allow
them to consume more fish with little effort.
In terms of capacity or supply ability, there has not been any problem that I know of because, unfortunately,
none of our marine products have sold so much that they are in short supply. In our case, the big products
are mainly vegetables. Vegetables and fruits make up about 30% of our sales. Some of them are very
expensive, but many customers find them more attractive than other products because they are fancy andexpensive. Compared with its internal counterparts, the marine-product category has not faced any problems
so far.
Moderator: Thank you. Well, as we have little time left, let me ask you the last question.
You mentioned earlier that your Company would respond flexibly depending on the situation. You areprobably in a situation now that has brought about a sudden surge in the growth rate partly due to the spreadof new coronavirus infections. In order for your Company to continue this trend for five years and 10 years
from now, do you think that it will be important for your Company to continue to respond to the situation
flexibly?
Takashima: Yes, that’s exactly what I mean. Sorry, but I didn't quite understand the intention of the question.
Anyhow, I think it is important to respond to changes, so I will make sure that our Company will do that. The
services that I think are easy to respond to changes are subscription services, because with subscription
services, we can keep track of changes in customers’ behaviors much more easily because we deal with thesame customers every week. It is not necessary to see and analyze the whole picture of changes and we canfocus on chasing each customer, which makes it much easier to grasp their behaviors.
There are changes in the customers’ surroundings, like their children entered or graduated from elementary
school or they moved to a different town because of a job transfer or they bought a house. Or they may suffer
some sort of illness and are hospitalized. These changes in customers are extremely important factors for ourservices.

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Rather, these changes in personal lives are sometimes bigger changes for customers than social changes. We
will keep track of these changes in each customer and respond flexibly to them and changes in the society at
the same time. I think that this will be a fitting way for us to respond to changes.
Moderator: Thank you. We have almost reached the time to finish today’s session, so we are finishing themeeting now.
Thank you very much for your attendance today. As for the questions that have been submitted but we wereunable to answer today, we will upload the answers separately on our website.
Well then, thank you very much for watching today. That’s all for today.
Takashima: Thank you very much.
[END]______________
Document Notes
1.
2.

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This document has been translated by SCRIPTS Asia.

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